Michelle Singletary: Something to cheer about

Michelle Singletary writes for The Washington Post Writers Group. She may be reached at singletarym@washpost.com.

4:00 AM, Jul 14, 2013

I had a “Die Hard” moment when I saw that the Federal Trade Commission had slammed a debt collector for various infractions, including trying to collect money that people didn’t owe.

When Bruce Willis is after a bad guy and he says “Yippee-ki-yay,” you want to pump your fist and cheer because justice is being served.

That’s my reaction to the announcement from the FTC that it has levied a $3.2 million civil penalty against Expert Global Solutions — which the agency says is the largest debt collector in the world — and its subsidiaries. The penalty is the largest ever obtained against a debt collector, said Christopher Koegel, assistant director in the agency’s division of financial practices.

This case is a big deal and may help significantly curb some unsavory practices by debt collectors, who generally operate on behalf of an original creditor or buy debt outright. In the latter instance, the debt can be sold multiple times. Often, as the debt becomes older and sold over and over, there is limited documentation other than the debtor’s name, last known address, Social Security number and debt amount.

Every year, the FTC receives more complaints about debt collection than any other industry, Koegel said. Since 2010, the agency has brought 15 debt collection cases collecting more than $52 million.

When the recession hit, so much consumer debt collection was going on that the agency ramped up its efforts to protect consumers, Koegel noted.

The FTC says Expert Global Solutions violated the law when it called consumers at home or on their jobs multiple times per day, even after being asked to stop or told that the person’s employer prohibited such calls.

One tactic that debt collectors use is to shame people into paying a debt. They do this by calling a person’s relatives, neighbors, co-workers or even a boss and then disclosing private details. But the law prohibits debt collectors from sharing a person’s debt information with third parties except under limited exceptions. Under the agreement with the FTC, Expert Global Solutions and its subsidiaries can’t leave voice mails that reveal the alleged debtor’s name or the fact that he or she may owe a debt. The company will also be required to record at least 75 percent of its debt-collection calls beginning one year after the date of the order, and retain the recordings for 90 days.

I believe companies have a right to pursue debts they are owed. They have a right to sell their right to collect such debt to other companies. But that right shouldn’t result in harassment. People shouldn’t be threatened or lied to or relentlessly pursued for debt that isn’t theirs.